The government is on the hunt for GST (Goods and Services Tax) defaulters as compliance rate of tax filers, including composition scheme dealers, under GST has gone down. As per the data shared by minister of state for finance, Shiv Pratap Shukla, in response to a Lok Sabha question, the percentage of taxpayers who have not filed returns under GST has steadily risen in the past 12 months to over 28 per cent in November 2018. The percentage has increased from 10.6 per cent in November 2017.
The percentage of filers for composition scheme (under which traders, manufacturers, and restaurants pay a low nominal tax rate) who have not filed returns has also shot up to 25.4 per cent in July-September 2018 from 15.0 per cent in July-September 2017, according to the data.
The MoS for finance confirmed that the authorities are looking at an extensive plan to locate such missing GST taxpayers.
The details of the non-filers of returns are regularly shared with the jurisdictional tax authorities and measures including inspection, visit of premises, search and seizure are being undertaken wherever required, the minister said in his written reply.
The government has also identified cases of fake invoices being used to claim input tax credit.
In 2018-19, till December, 499 such cases have been noticed that amounts to Rs 3,894.94 crore whereas the number of cases in July 2017-March 2018 was only four involving Rs 9.7 crore. The government is committed to increase the percentage of compliance by taxpayers under GST. In this regard, an extensive outreach program has been carried out across the country to create awareness among traders, industry bodies and other stakeholders, the minister said in his reply.
Further, effective enforcement measures are being undertaken to check cases of tax evasion and fake invoices, it further said.
Revenue concerns for the government would increase following the low compliance rate along with multiple rate cuts under GST. Revenue collections under GST are already an issue for the government, with the budget targets likely to be missed this year. For the current financial year till December, the government had got Rs 8,71,043 crore as GST revenue, that is short by Rs 4.8 lakh crore of the overall target.
Government finances are already stressed, with the fiscal deficit for the April-November period hitting Rs 7.2 lakh crore mark or 114.8 per cent of the full-year target of Rs 6.2 lakh crore.
The low compliance rate might be one of the challenges in taking the composition scheme to service providers. The proposal for that will be discussed in the upcoming GST council meeting scheduled for January 10.FE Online